If you don't want to start a grooming business from scratch, buying an existing one may be your alternative. First of all, there are the plusses and minuses.
Here are some of the main options to consider. Bank financing For many businesses, the first port of call when seeking business financing will be their bank.
One reason for that is the guidance that banks will be able to give. Of course, banks themselves have a range of options available. These include Unsecured business loans: A straightforward way of borrowing money, with fixed repayments including interest over a set period of time.
Loans are most suitable for medium to long-term plans.
Interest rates and the amount you can borrow will depend on your circumstances and the individual bank. This can be an effective way of raising cash for working capital or investment.
The amount you could borrow will depend on the value of the asset. Secured loans will usually offer a lower rate of interest than unsecured borrowing, while unsecured loans allow you to borrow without placing assets at risk of repossession.
If you're looking to buy or remortgage business premisesthere are several products that could be available to you including buy-to-let loans for business and commercial mortgages.
You might also consider talking to a Commercial Finance Broker or a Barclays Business Manager — they will provide guidance, take you through the options available to you and deal directly with the lender on your behalf. These are more suitable for day-to-day requirements rather than for fuelling the growth ambitions of established companies.
They can be useful in helping to provide financial support when your business needs it most. Business credit cards 1: These are most effective when used in a similar way to overdrafts and are best suited to day-to-day needs.
They can provide a lifeline when waiting to harvest the fruits of your business investments. Invoice finance gives you the power to unlock cash tied up in your outstanding invoices and can provide an ongoing solution that grows with your business. This helps you to fund the purchase of an asset.
Government-supported borrowing The government could also help your business to secure necessary funding through a variety of measures, including Enterprise Finance Guarantee: The government provides a range of grants for small businesses, which are administered by several different bodies.
Most are linked to specific activities, such as research and development, and while they don't have to be repaid you will have to meet strict qualification criteria. Find out more about the support that could be available for your business.
Family and friends You could turn to family and friends to help provide funding for your business, but there are important pros and cons to be aware of. One of the main benefits could be flexibility over repayments, as well as providing additional finance on top of what you can borrow more formally elsewhere as long as you are able to service all the repayment obligations you have made.
But you — and your investors — should understand the commitments being made by all parties. External investors Offering a share of your company or equity for an investment by a third party could be an effective way to raise cash.
In contrast to a business loan from a bank, you may not have to make any repayments on the money invested. However, so-called Angel Investors wealthy individuals who back businesses with their own money and Venture Capitalists can strike a hard bargain in terms of the share of your company they take in return for their investment.
Alternative investment In recent years, a number of alternative financing opportunities have been developed that could be suitable for your business.
This is where businesses raise small amounts of money from lots of people, via specialist online platforms. In exchange for the cash, businesses can promise a range of things such as early access to products, discounts or equity stakes in the business. Crowdfunding can be used for purposes as diverse as funding a small project to getting a new business off the ground, but with many businesses fighting for attention it can be hard to successfully raise the money you might be looking for.
This combines aspects of traditional lending and crowdfunding together, with specialist online platforms allowing businesses to take out loans funded by many individual small investors.
The criteria for borrowing in this way can be less strict than traditional banks, while you may also be able to borrow more and get your hands on the cash more quickly. But costs are not always lower than they would be for a traditional business loan from a bank.
Preparing for funding Knowing that you want funding for growth is only one part of the process. Your business also needs to be ready and able to satisfy the potentially diverse requirements of those that might lend to you.
You know what type of funding you want Doing your research can really pay dividends when it comes to business financing. Weighing up the pros and cons of all the options — in advance — can be crucial to a successful outcome. But this consideration stage should also focus on your own requirements too, both now and in the future.
For example, borrowing from a family member may seem like an easy source of funding initially, and for many businesses it might be the most suitable option. This helps us to make a quick decision on funding requests, and often requires you to answer just a few questions in order to get your funding.Buying an existing business can help you hit the ground running.
Here's what you need to know to find a great deal. Starting from scratch isn't the only way to get started. Buying a business involves more upfront cost but less risk than starting from scratch. While buying an existing business typically involves more upfront cost, it also presents less risk than.
A business plan may be an annual plan for managing your business. Or a business plan may be primarily developed for attracting capital. There are exceptions, and often the difference between annual plans and business plans becomes muddled.
Advantages of Purchasing an Existing Business There are many advantages to buying an existing business over trying to get a startup off the ground. An existing business should already have a working model, clients, reputation and hopefully a credit rating that can help you secure a loan for its purchase.
A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts.
There can be many good reasons why buying an existing business could make good business sense. Remember though, that you will be taking on the legacy of the previous business owner. You need to be aware of every aspect of the business you're about to buy. Business acquisitions, franchise purchases and newly developed products are just some of the events that might prompt an existing business to create a business plan. The creation of a formal business plan is an often overlooked step in the process of buying a business. Though the company you want to buy may already be up and running, establishing a well.
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